All Budget "Pay Fors" are not CREATE(d) Equal

  • by: Peter Pitts |
  • 01/08/2018
In a rush to find “pay fors” to balance the budget package that Congress is working to pass by January 19th, some lawmakers are pushing forward the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act.

It’s a bad idea with dangerous unintended consequences. It’s time to take a breath – because the CREATES Act won’t speed a single drug to market or lower the cost of medicines for a single American. What it will most certainly provide is a windfall for the trial lawyers, raising legal costs for the pharmaceutical industry and threatening the incentives to invest in development programs for new medicines.

The CREATES Act aims to provide a series of new legal provisions that will make it easier for drug companies to introduce generic alternatives, thus spurring competition and bringing down prices. It’s well intentioned. Unfortunately, it’s worded poorly – and would lead to dangerous unintended consequences. Instead of bringing generics to market sooner, these bills could endanger patients’ lives and encourage costly, needless litigation.

CREATES strips the FDA of its watchdog role. Under its proposals, generic manufacturers won’t be required to outline testing and safety protocols for the FDA to approve. Even if a generic drug maker’s proposed risk evaluation and mitigation strategies are inadequate, the FDA has no authority to reject or halt the transfer of medicines to the generic company for testing. Whatever happened to “safety first?”

CREATES contains ambiguously worded liability provisions that subject innovators to unfair legal risk. Generic drug companies often obtain brand-name drug samples and ship them off to third-party research firms to perform clinical trials. If the third party is negligent with the samples, patients could get hurt. Under the bill’s terms, patients would be able to sue the brand-name drug company, even though it had no control over the testing or safety protocols. Higher legal fees for drug companies ultimately result in higher costs for everyone else.

CREATES would allow generic drug manufacturers to sue brand-name manufacturers if they fail to hand over their drug samples for testing within 31 days, or if the companies do not reach an agreement on shared risk evaluation and mitigation strategies for risky drugs. Such subjective wording is music to trial lawyers’ ears.

Congress deserve praise for trying to find pay-fors that bring generic medicines to market faster, relieving consumers from high drug prices. Yet good intentions don’t change the fact that the CREATES ACT, as currently constructed — is deeply flawed.

Congress could help consumers by reworking the legislative language to end bad behavior without gutting safeguards for patients or enabling unscrupulous trial lawyers to file costly, pointless suits. Whether it’s the practice of medicine or the development of public healthcare policy two rules apply – first, do no harm and, second, be wary of trial lawyers bearing gifts. The CREATES Act as a budget pay-for would be a Pyrrhic victory.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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